USDA Funding

We applied for a USDA Direct loan on 12/23. Credit was pulled 12/28, and we wait...and wait....and wait! LOL

Still waiting.

I called our loan specialist today and she said that there was currently no funding because Congress couldn't get things in order? Has anyone else heard this? If it's correct, any idea on a time frame? We live in PA if that makes a diference.

We really need to get out of our apartment for several reasons, so I'm pretty bummed out. She couldn't even tell me the status of my application except that she recieved all of the verifications but she doesn't have time to look at it right now. She said they are trying to close everyone they can at the moment, but we're pretty much to late.

I want to cry. I hope someone knows something!

She said we could apply for USDA Guarenteed or do FHA, but if we qualfy for Direct, we'd be silly not to wait, right?

Re: USDA Funding

If a USDA direct loan is the optimal solution for you, I would wait it out as long as feasible. I know the waiting period for USDA loans is pretty long right now. But I don't know the differences between direct or guaranteed and how they compare to FHA loans.

I am doing an FHA loan and I have a tentative closing date of 1/30. We were preapproved and on contract on 1/5.

Re: USDA Funding

Direct is a lot different from Guaranteed. The government actually lends the money in a direct loan, so the requirements are a lot more strict. I have heard of funding issues with this, and I have heard a number of dates floating around as to when that will happen. Unfortunately I can't tell you for certain. I will say that direct loans are awesome if you qualify for them. The terms and flexibility are fantastic.

With a USDA guaranteed loan, the USDA RD program is essentially just insuring the loan in the event of a default, so there are no funding requirements. I'm not sure if both types of loans are processed by the same group or not, but I would imagine that they are.

I'll do some digging and post any information I can come across. In the meanwhile, who is your loan specialist? Is this a contact with the USDA or someone at a bank? If the latter, I would give the USDA office in your area a call to try and find out firsthand what is going on with funding. Direct loans can be done entirely through their office as opposed to guaranteed which need to be underwritten separately by a bank before secondary approval goes to them.

Re: USDA Funding

Direct is a lot different from Guaranteed. The government actually lends the money in a direct loan, so the requirements are a lot more strict. I have heard of funding issues with this, and I have heard a number of dates floating around as to when that will happen. Unfortunately I can't tell you for certain. I will say that direct loans are awesome if you qualify for them. The terms and flexibility are fantastic.

With a USDA guaranteed loan, the USDA RD program is essentially just insuring the loan in the event of a default, so there are no funding requirements. I'm not sure if both types of loans are processed by the same group or not, but I would imagine that they are.

I'll do some digging and post any information I can come across. In the meanwhile, who is your loan specialist? Is this a contact with the USDA or someone at a bank? If the latter, I would give the USDA office in your area a call to try and find out firsthand what is going on with funding. Direct loans can be done entirely through their office as opposed to guaranteed which need to be underwritten separately by a bank before secondary approval goes to them.

Thank you so much! That would be wonderful!

The loan specialist is the lady at our local USDA office. We were just talking about maybe we should just apply for guarenteed, but I'm a stay at home mom with a daughter with autism and my husband is a paramedic that works every moment that he isn't sleeping. I'm worried that if we go guarenteed, and we need the subsidy for whatever reason, we'd be under even more stress if we didn't have it. And we really qualify for direct, so it is a better program and if we qualify for it we should just wait it out...right?

Re: USDA Funding

Yes, absolutely. I would wait it out if at all possible. The direct program is a whole lot more flexible whereas guaranteed doesn't really offer you anything beyond some relief in the downpayment and PMI department.

Unfortunately I wasn't able to find a whole lot out. I did find some funding notices and stuff like that. My interpretation was that a certain amount of money was released and that it might have to last longer than initially expected. I don't know that it's as bad as the person you spoke with indicated. If I were you, I'd become the squeakiest wheel they hear from. Through a Google search I actually found my way back to a thread here where someone indicated that the direct route was a very long, drawn out process. It sounds like everyone has to deal with a lot of delays through USDA direct, and by becoming the daily caller you're that much more likely to get some attention.

I'll keep looking around. Please do keep us updated, and I wish you the very best.

Re: USDA Funding

I'm currently in the stages of applying for USDA direct. I just filled out the pre approval and now they have sent me the offical ones. I've talked to the lady in the PA office (I think in Lebanon) a few times. She tells me that theres not a huge rush for me to fill it out because currently there is a wait list. There is no funding right now. They don't expect to know anymore about fundng until Feb. At my office, she said the line was about 7 applicants. So since you already applied in dec., if there is more funding in feb. and you don't have too many people in front of you on the wait list, then you should get funding.

It is worth waiting. You won't have to pay a PMI, you won't need to put down a downpayment, your interest may be subsidized, and I believe you would qualify for a bigger loan using USDA Direct.

The only con is the waiting. If you're willing to wait, then go for it. If not, if you don't get the funding in Feb. (or whenever they get more money) , you may not get any until the next fiscal year for them, which starts in Nov? maybe earlier.

My back up plan for the USDA Direct, since I'm not willing to wait that long is going FHA. I'm going to apply for downpayment assistance, you would qualify too I assume. In my county, we'll have to go to a 1-1 session and take a class. They will put down upto 5k to 7k depending on where you live in the county.

Re: USDA Funding

I'm currently in the stages of applying for USDA direct. I just filled out the pre approval and now they have sent me the offical ones. I've talked to the lady in the PA office (I think in Lebanon) a few times. She tells me that theres not a huge rush for me to fill it out because currently there is a wait list. There is no funding right now. They don't expect to know anymore about fundng until Feb. At my office, she said the line was about 7 applicants. So since you already applied in dec., if there is more funding in feb. and you don't have too many people in front of you on the wait list, then you should get funding.

It is worth waiting. You won't have to pay a PMI, you won't need to put down a downpayment, your interest may be subsidized, and I believe you would qualify for a bigger loan using USDA Direct.

The only con is the waiting. If you're willing to wait, then go for it. If not, if you don't get the funding in Feb. (or whenever they get more money) , you may not get any until the next fiscal year for them, which starts in Nov? maybe earlier.

My back up plan for the USDA Direct, since I'm not willing to wait that long is going FHA. I'm going to apply for downpayment assistance, you would qualify too I assume. In my county, we'll have to go to a 1-1 session and take a class. They will put down upto 5k to 7k depending on where you live in the county.

Thank you! I'll hope for both our sakes that it's in February!

We live in Northampton County, so our office is in Allentown. I think most people want to live nearer to the city. So I'm hoping there isn't as big a demand for this part of the area because there really isn't much rural about it. I wonder if she can tell me where we are on the list. She didn't seem like the most friendly person. We found a house that we LOVE. Of course...LOL...and it's a short sale. I'm hoping that if she can tell us that we're next on the list for funding that we could put in an offer and see what happens. Maybe the seller would be willing to rent it to us for a few months if they needed to. I'm thinking since it's a short sale they'll do whatever they can do to get rid of it.

IF we have to wait until November or whenever, we've got to have another plan. We can't wait that long. Our apartment is killing us! LOL

Re: USDA Funding

I know, we're in the same situation. We would love to wait for USDA but we can't wait that long for funding. You should probably look into what down payment assistance is available in your county.

It does seem like your office is backed up though. Just because they don't have funding, you should still get a certificate of approval. If you search the forum (macbook guy) had a very detailed experience of his usda direct loan.

Re: USDA Funding

Yes, you should still get your certificate of approval. I was told that would come to me (when I can get it in 6 months if i can't get the CA deleted) even if the funds aren't available yet. Then I would be in line for funds, without the certificate it's like you're not in line

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